The Value of Competitive Balance Round A Draft Picks

A couple of weeks ago, I had the pleasure of making a presentation at the Society for American Baseball Research’s Annual Convention in Miami. When one thinks of SABR, one may immediately think of Sabermetrics, however SABR is more diverse than one initially thinks.

SABR hosts a convention every year in the summer as well as  a newer annual conference in Phoenix. The Phoenix conference is completely centered around analytics. This convention in Miami welcomed a much different crowd of baseball historians, authors, and people who had more of an interest in the growth of baseball since the days of the dead-ball era and beyond; it's about far more than statistics!

Featured during the conference were 32 research projects selected to be presented by SABR members. Project topics included an analysis of global no-hitters by Dirk Lammers, A calculation of what salary Josh Gibson would have earned by Michael Haupert, and many more. My project was an in-depth look into the Value of Competitive Balance Round A picks in the Major League Baseball first-year player draft. These are a set of six to seven picks that end the first round, directly after free agent compensation picks. What makes these picks special and unique is that they are the only set of draft picks that can be traded.

As a result, there’s a high level of variability in terms of how teams value these draft picks. For instance: In 2012, the Pirates and Marlins linked up to make the first ever trade of these picks. The deal was struggling first baseman Gaby Sanchez and a low-level minor leaguer to the Pirates for a Competitive Balance Round A pick (#39 Overall). After the trade, Neil Huntington explained the trade by making this statement on 970 ESPN Pittsburgh:

But … you recognize there’s about a 15% chance of getting an everyday big-leaguer in the 30-to-40 pick range... We felt like it was worth that 15% chance that we were going to get an everyday big-leaguer.

That’s exactly the question! What percentage of players in this range of picks become viable major leaguers? To nail down the range of picks to evaluate, I looked at the range that Competitive Balance picks were set at since 2013. Each year, they have fallen between picks 34 and 42, so that became the range of picks to analyze. The video below goes into each draft from 2006 to 2015 and identifies what percentage of players drafted in the Competitive Balance Round could be considered "everyday guys." By first defining what a starting player is, I was able to use WAR and other factors to determine a more accurate percentage.

There is real value in the production of players in this pick range that has previously gone unnoticed. Another point of the project was comparing bWAR averages between four different ranges of picks: 1-10, 11-20, 21-33, and 34-42. Consistently, picks 1-10 had the highest average WAR. Picks 11-20 followed suit. For picks 21-33 however, there were comparable WAR averages almost every year from 2006 to 2012, in which there is the most data. In fact, Competitive Balance range draft picks had higher WAR averages in four out of the seven years.

There’s plenty more to see through the video and slideshow below. Here is an outline of key points in the video:

4:30 - Defining Competitive Balance Round A Draft Picks

7:45 - Testing Neil Huntington’s 15% estimate

8:40 - Creating a Scale to Measure Player Impact

9:15 - Analyzing Each Draft

13:00 - Evaluating Competitive Balance Range Picks to the 15% Estimate and bWAR values

15:20 - Draft Slots are not as valuable as an actual prospect

16:15 - Competitive Balance Range picks that become prospects have headlined major deals

17:45 - How Large Market Teams Can Take Advantage

19:00 - Possible Draft Expansion

20:45 - Q&A

Click Here for the Presentation Slideshow

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Ronnie Socash is a contributing writer at Beyond the Box Score. You can follow him at@RJSocash.